H.B. 2692, as amended, addresses the issue of controlled title
insurance business. The bill amends current law in the following
manner.

Disclosure. No title insurer or agent may accept an order for
title insurance or issue a title insurance policy to a consumer
referred by a producer of such business who has a financial
interest in the title insurance company unless the producer
has disclosed in writing to the consumer referred that

the producer has a financial interest in the title company
to which the consumer is referred;

the nature of the financial interest and a written estimate
of the charge or range of charges generally made for title
services;

the person (consumer) is not obligated to use the title
insurer in which the producer has the financial interest;

the consumer has received the names and telephone
numbers of other title insurers or agents operating in the
county; and

the disclosure statement is signed by the consumer prior
to any commitment having been made to the title insurer
or agent.

Tie-in Arrangements. No title insurer or agent may condition
the selling of property or the making of a loan to a consumer
upon the purchase of title insurance from the producer having
a financial interest in the title insurer or agent. Further, no
title insurer or agent may accept an insurance order on a form
with the title company name pre-printed prior to the buyer or
seller selecting that title company.

Penalties. Any producer who violates the provisions of this
law would be liable to the consumer in an amount equal to
the amount of the premium paid for the title insurance; be
subject to a fine imposed by the Insurance Commissioner in
an amount equal to five times the premium for the title
insurance; and if the producer were a licensed real estate
agent or broker, the producer would be deemed to have
committed a prohibited act under the licensing statutes for
such persons.

Financial Arrangements. The owner of the title insurance
company who is a producer of business for the company may
receive income from the title business if the financial interest
is disclosed as required, the payment is not in exchange for
business, and the payment is only a return on the investment
of the owner in the business.

Competitor's Cause of Action. After the act becomes
effective, any title insurer or agent who is a competitor of
another title insurer or agent who violated the provision of
this law has a cause of action against the violator and is
entitled to damages as determined by the court. Court costs
and attorney fees may be awarded to the successful party in
any such action.

Rules and Regulations. The Insurance Commissioner shall
require title agents to provide core title services as mandated
by the federal Real Estate Settlement Procedures Act and
may adopt rules and regulations necessary to carry out the
law.

Controlled Business. The unfair trade practices act in the
Insurance statutes relating to the percentage of business a
title insurer or agent may control also would be amended.
The exemption from any limitation on the amount of controlled business would continue for real estate transactions in
counties of 10,000 or less and a new exemption would be
added for real estate transactions in counties with a population of 200,000 or greater. The limitation of 20 percent of
controlled business would apply on real estate transactions in
counties with a population greater than 10,000 but less than
200,000. (The House Committee of the Whole amendment
changed the population size for the exemption for controlled
business from 50,000 to 200,000.)

Background

H.B. 2692 was supported by the Kansas Association of
Realtors whose representative noted that consumers are better
served when there is competition in the marketplace, that
controlled business arrangements permit streamlined home
purchasing opportunities and buyers and sellers want the convenience of one-stop shopping. The Kansas Building Industry
Association, Inc., the Kansas Bankers Association, and several real
estate agency representatives spoke or wrote in favor of the bill.

The Kansas Land Title Association opposed H.B. 2692.

The fiscal note on the bill indicates it would have no fiscal
effect.

1. *Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.ink.org/public/legislative/fulltext-bill.html.